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US Reduces Tariffs on Indian Goods After Trade Agreement

lite News Desk 2 min read

At a glance

  • US tariffs on Indian goods lowered from 25% to 18% on February 2, 2026
  • Punitive US tariff linked to Indian Russian oil imports dropped
  • India recently signed a free trade agreement with the EU

On February 2, 2026, the United States announced a reduction in tariffs on goods imported from India, marking a change in trade policy between the two countries.

US President Donald Trump stated that tariffs on Indian products would be reduced from 25% to 18%. This adjustment followed a period of heightened trade tensions between the two nations in the previous year.

In addition to the tariff reduction, President Trump announced the removal of an additional 25% punitive tariff that had been imposed in response to India’s purchases of oil from Russia. This measure had been introduced during a period when trade relations between the US and India were strained.

Indian Prime Minister Narendra Modi welcomed the US decision, noting that goods produced in India would now face an 18% tariff when entering the American market. The announcement was made shortly after India finalized a free trade agreement with the European Union on January 27, 2026.

What the numbers show

  • US tariffs on Indian goods reduced from 25% to 18% as of February 2, 2026
  • Punitive 25% tariff related to Russian oil imports dropped
  • US-India tariffs had reached 50% in August 2025
  • India signed an EU free trade agreement on January 27, 2026

Trade tensions between the US and India had escalated in 2025, with tariffs rising to 50% in August of that year. The increase was linked to India’s continued imports of oil from Russia, which prompted additional US trade measures.

The recent US-India trade announcement came just days after India entered into a free trade agreement with the European Union. This sequence of agreements highlights recent activity in India’s international trade relations.

According to media reports, the US government’s decision to reduce tariffs and remove the punitive measure was officially communicated by President Trump. The Indian government responded positively to the announcement.

These developments reflect procedural changes in trade policy between the US and India, following a period of increased tariffs and diplomatic negotiations in the previous year.

Industry reaction

The Indian government welcomed the reduction in US tariffs, stating that the new rate would apply to products made in India. No additional institutional reactions were reported in the available sources.

* This article is based on publicly available information at the time of writing.

Sources and further reading

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